What is Performance Management?

It is year end at RST Company. Managers and employees are going through their annual routine of performance appraisal. Malcolm the Manager manages a team of 10 employees. He sure has a lot on his plate, having to meet with direct reports and filling out forms as Human Resources (HR) department needs the performance appraisal to be completed by the end of the month. Malcolm figures that the fastest way to do it would be to email a copy of the appraisal form to each employee he is in charge of, get them to fill up the forms, meet with them for 15 mins each and signs the forms. This will ensure that the paperwork gets done on time, HR is satisfied and everyone can get back to their usual routine.

What’s wrong with this picture? Is this a common occurrence in most companies?

Here’s the fundamental issue. Malcolm and his employees view performance appraisal as a “necessary evil”. They do it because they “need to” or “have to”. They do not realise that when done correctly, performance management has the ability to solve many of the problems they are facing. How can you use performance management as a meaningful tool to help people and your organisation succeed? Let’s start by taking a look at what is performance management.

Goal setting, giving feedback, coaching and formal performance appraisal are some of the typical activities relating to performance management. They can be broadly categorised into formal and informal performance management. Formal processes include the actual performance appraisal, goal setting, promotion evaluation and termination of employees while informal processes involve issues of giving feedback on a regular basis and coaching employees.

For performance management to be effective, we need to have a clear idea of what we want to achieve. Clear goals are essential if we are to evaluate the impact of performance management. Most managers are familiar with the SMART acronym, which is a set of criteria that goals should meet. They should be Specific, Measurable, Achievable, Realistic and Time-Bound. However, passing a SMART test is not enough to make the performance goal valuable to your company or employee. Goals have to be aligned with the company’s strategy and be geared towards improving current performance and spurring future growth. A good strategy for setting objectives is to have the employee and manager set goals together such that both parties are equally agreeable of what is to be achieved and share accountability in making sure that progress is made towards the desired outcome.

An important part of the performance management cycle is giving employees feedback on how they are doing. Even before we step into the world of work, we have been seeking feedback from our parents, teachers and friends to get a sense of how we are doing. Feedback that is delivered well can help employees identify areas for development, provides re-assurance that we are progressing in the right direction and boost confidence in our abilities, while feedback that is done poorly can leave us feeling de-motivated, confused and unsure about our capabilities. Thankfully, gone are the days where the manager would merely sit next to the employee and give a “good”, “acceptable” or “poor” to determine his performance appraisal for the entire year. Giving feedback is a continuous process just like performance management. A basic way to start with giving feedback regularly is for managers to schedule weekly one-on-one meetings with their direct reports. This allows managers to recognise achievements of their employees built against a backdrop of trust between both parties and for managers to provide timely and accurate feedback to the employee. Problems arise when feedback is withheld until for example, the annual performance appraisal.

Another activity that brings forth opportunities for learning and improvement through the day to day activity of executing their tasks is through coaching. Managers do not tell employees what to do or how to do something, but encourage employees to explore solutions for a problem they are facing. Managers who are good coaches are active listeners and communicators who can correctly identify areas of improvement for their coachees. Effective coaching is more of how you do things rather than what you do. It is about the attitude and approach that the manager needs to adopt that will make coaching effective. To know more about what attributes a good coach should have, click here to find out more. If you have decided to try coaching as a way to improve performance for some of your employees, take a look here for practical steps to get started.

When it comes to the actual performance appraisal meeting, most managers tend to swing on the extremes, choosing to avoid or delay them as much as they could or tackle them in as little time as possible. Employees are wary and anxious too. The problem is that both managers and employees are approaching the meeting with the wrong mindsets. While it is impossible to eliminate the performance appraisal processes, managers can set up the meeting such that they add value for the employees and present the meeting as a tool to drive effective performance. Learn about how to set up the appraisal meeting here. Setting the right tone and using the appropriate language will lead to a productive and engaging discussion during performance appraisals. Here are 5 types of conflict provoking language that you need to avoid during interactions about performance. Managers need to remind themselves that it is not the rating or actual assessment of the employees that improves performance. What matters is the conversation that takes place during the meeting. Therefore, how to conduct the appraisal meeting requires lots of preparation for a fruitful experience for both manager and employee.

Once you have completed the appraisal process, it makes sense to do a follow-up on matters that arose during the appraisal meeting and tie up loose ends. How does the story end? The story never ends. The performance management process does not end the year, but is a preparation of plans for the coming year. If you approach it with the right mindset, you can make it work and brings benefits to everyone.